May 13, 2021
Stationery and Office Supplies Limited (SOS) for the three months ended March 31, 2021 reported revenues of $313.32 million relative to $336.90 million booked in same period in 2020, reflecting a 7% decrease. The company stated, “SOS has had a strong start to 2021 which can be seen clearly in the below comparisons between the 1st quarter of 2021 and 2020. During the quarter, SOS was able to export its first 2 containers for the year, both destined for St. Lucia. These exports together with the new product lines that SOS now carries, helped SOS to achieve its second highest pre-tax profit figure in its history.”
The Company’s cost of sales totaled $143.71 million, down 16% relative to the $171.69 million reported in 2020. As a result, gross profit rose by 3% for the three months amounting to $169.61 million relative to $165.21 million booked in the previous corresponding period.
Other income fell by 55% to close the period at $1,986 versus $4,401 reported in the same period last year. While finance income rose 112% to close at $247,707 versus $117,041 booked in the corresponding period las year.
Administrative and general expenses totaled $80.58 million, down from the $86.06 million documented in the prior comparable period. Selling and promotional expenses contracted by 10% to close at $21.07 million (2020: $23.31 million).
The Company’s depreciation cost amounted to $8.25 million, a 9% decline relative to the $9.05 million recorded in 2020, while finance cost closed at $2.47 million (2020: $3.34 million).
Loss on foreign exchange increased closing the period under review at $2.15 million (2020: $1.86 million).
Profit before taxes went up by 26% to $55.34 million versus $43.80 million earned in 2020. No taxes were incurred as such, net profit for the period totaled $55.34 million (2020: $43.80 million)
Earnings per share for the period amounted to $0.22 (2020: $0.18). The twelve-month trailing EPS amounted to $0.18. The number of shares used in the calculation was 250,120,500. As May 12, 2021, the stock traded at $6.00 with a corresponding P/E of 33.63 times.
SOS highlighted that, “Our new lines of home office furniture and industrial racking continue to be well received within the market. SOS has also been able to add additional options to the home office furniture line, giving our customers additional choices and variety available for them to purchase from stock. In addition, there has been significant demand from our customers for our locally manufactured desk and counter mounted acrylic screens which are used for employees’ protection against the Covid-19 virus. These screens are custom made for our clients and has aided them in continuing to work within their existing office layout.”
Balance Sheet Highlights:
As at March 31, 2021, total assets increased by 0.3% to close at $941.25 million from $938.68 million twelve months earlier. The increase in total assets was primarily driven by an increase in ‘Bank and Cash’ and ‘Inventories’ which closed at $120.54 million (2020: $90.95 million) and $244.80 million (2020: $226.37 million), respectively. This was tempered by ‘Trade and other receivables’ which contracted by 28% to close at $124.16 million (2020: $172.39 million) for the period under review.
Equity attributable to stockholders of the Company as at March 31, 2021 stood at $665.07 million (2020: $640.45 million). This translated in a book value per share of $2.66 (2020: $2.56).
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation(s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.